Wind farm wins WA nod

A proposed $150 million wind farm in Western Australia owned by
Macquarie Group
has cleared a major ­hurdle, after the state’s electricity ­regulator rejected complaints from neighbouring operators that they would have to shut down their wind turbines because there would not be enough capacity for all the generators on the region’s power lines.

The Mumbida Wind Farm – a joint venture between state-owned Verve Energy and Macquarie near Geraldton, north of Perth – is slated to be operational by 2012 and to produce enough power for 35,000 homes.

It is part of a flurry of wind projects under development in the state. The UBS-backed Collgar Wind Farm further inland near Merredin is scheduled to start operating by June.

The 250-megawatt Collgar project will briefly be the biggest single-stage wind farm in the southern hemisphere before it is dwarfed by the $1 billion Macarthur Wind Farm being developed in Victoria’s west, part of which is due to come online this year.

Although less advanced, Macquarie’s Mumbida project won a 30-year operating licence from WA’s Economic Regulation Authority late last week.

In approving the licence, the ­regulator rejected a complaint from former tycoon
Ric Stowe
’s Griffin Power, which owns the nearby Emu Downs Wind Farm, about the impact of Mumbida on its operations.

“The authority has concluded that constraints to capacity output for renewable generators is part of the operation of the electricity wholesale market, which independent participants are aware of at their entry into the market," the regulator said.

“Therefore the real or potential ­curtailment of output as a consequence of new generation entrants is not a public interest issue."

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It said there were few examples of wind farm operators having to shut down their machines because there was not enough capacity in the region’s power lines to transmit the energy to Perth, although another farm, at Walkaway near Mumbida, would be affected “somewhat".

The issue could flare again once Mumbida is operational, given the state government has delayed approving a capacity-expanding upgrade to a major transmission power line between Perth and Geraldton due to cost blowouts.

Emu Downs was caught up in the collapse of Mr Stowe’s debt-laden empire last year and is being sold by RBC Capital Markets and Royal Bank of Scotland.

The decision comes at a difficult time for the wind farm industry. Many projects have been shelved amid a slump in the price of renewable energy certificates due to an oversupply. The certificates are the incentive the federal government is relying on to help the industry fund new ventures and meet its target of 20 per cent renewable energy by 2020.